Qualifying Offer Deadline: A Rundown

Today is the first of the off-season’s many deadlines, as MLB has a pretty rigid schedule that determine the timing of various events over the winter. Today, being the fifth day after the end of the World Series, is the deadline for teams to extend qualifying offers to their own free agents, giving them the right to compensation if the player signs with another team this winter.

Last year, nine players received a qualifying offer of $13.3 million, and all nine rejected the contract and signed a larger deal thereafter. This year, the price of the qualifying offer has gone up to $14.1 million, and it seems likely that more than nine players will receive an offer. Here’s what we know so far.

Reportedly Will Get a Qualifying Offer

BOS: Jacoby Ellsbury, Mike Napoli, Stephen Drew
NYY: Robinson Cano, Hiroki Kuroda
ATL: Brian McCann
CIN: Shin-Soo Choo
CLE: Ubaldo Jimenez
KCR: Ervin Santana
PIT: A.J. Burnett
TEX: Nelson Cruz
SEA: Kendrys Morales

That’s 12 names that are more or less confirmed as receiving a qualifying offer, even if not all of them have been officially announced yet. And there very well could be several names added to that list, as there are players on the bubble who could still receive a qualifying offer before the day is out. Both Curtis Granderson and Carlos Beltran could very well end up receiving an offer from their original teams, and both look worthy of a $14 million salary for 2014, given their expected production and the amount of money that Major League teams have at the moment. It is possible that the Yankees (luxury tax concerns) and Cardinals (somewhat crowded OF) could decide that the offer isn’t worth the risk, but I’d bet on both players receiving the offer by the end of the day.

That would leave us with 14 players set to receive the qualifying offer. Of those 14, six of them would come from the Red Sox and Yankees, further proving that the free agent compensation system has little to do with promoting competitive balance and is far more of a price constraint on mid-level free agents. The qualifying offer is basically just a tax, and this winter is simply more evidence that any pretense of it being about distributing draft picks to low revenue teams who can’t afford to re-sign their free agents is a farce. The teams who can’t afford to re-sign their free agents generally can’t afford to let premium players reach free agency to begin with, instead opting to trade them prior to reaching free agency in order to obtain a better return than an end-of-first-round selection.

But, at this point, I don’t think even MLB is trying to sell free agent compensation as an agent of competitive balance anymore. It is pretty clearly a tax intended to drive down free agent salaries, and it seems that its purpose is generally understood publicly. While the price of the tax is small enough that it is unlikely to affect the bidding for stars like Cano or Ellsbury, it probably will have a negative effect on the price of the mid-tier players.

Will we see any of the 12 (or 14) accept the qualifying offer over the next week, after learning that having compensation attached nuked their market value? I think we might. Burnett looks like the most likely candidate to accept the qualifying offer, as he’s talked openly about either retiring or playing one more year in Pittsburgh, and doesn’t seem overly interested in exploring his options elsewhere, so taking the qualifying offer would simply end what should be a pretty easy negotiation, assuming he wants to play again in 2014.

Beyond Burnett, though, I think we could potentially see a few other possible accepting situations, with Curtis Granderson, Stephen Drew, and Kendrys Morales all potentially looking at markets that wouldn’t be too favorable with draft pick compensation attached.

Granderson will be 33 next March, spent half the year on the disabled list, and had the worst offensive season of his career in the games he did play in 2013. There’s certainly real potential for a bounce back season next year — Steamer projects +3.4 WAR per 600 plate appearances, for instance — but it’s likely a very short term value proposition, and teams have shown reluctance to part with the draft pick in exchange for a short term deal.

Even when Kyle Lohse’s market fell apart last year, and there was talk of him potentially signing a “pillow contract” to try and re-establish his market value with another strong year, few teams seemed interested in a one year deal because the price plus the compensation tax outweighed what they expected to get from Lohse over 180 innings. Granderson could very well be in the same boat, where his injuries and 2013 performance drive away those interested in a multi-year deal, and the compensation tax drives away teams who might be looking for a one year stop-gap. It seems unlikely that Granderson, with compensation attached, would actually be able to do much better than 1/14 on the free market, so he could very well take the deal and view it as his chance to have a rebound season before hitting the market again next year.

Drew is on the other side of that coin, having just completed his bounce back after a one year deal to re-establish his value, and is likely less interested in taking another one year deal given that he probably can’t raise his value much higher than it is now. 2013 Drew was likely the peak of what he can do now, and if he can’t get a multi-year deal coming off this performance, he might not ever get another one. But, even with a thin supply of shortstops on the market, Drew doesn’t look like the kind of player that teams will be lining up to sacrifice a draft pick for.

He turns 31 next March. Steamer projects him as a roughly an average player in 2014, and while the price of Major League players is going up, it’s hard to argue that average-ish players are worth outbidding a $14 million salary and paying the compensation tax. With Drew likely feeling some fondness for the Red Sox after having just won a World Series and seeing John Farrell stick with him despite his October struggles at the plate, a reunion for one more year seems like the best fit for both parties. And the easiest way for Drew to get that reunion while still receiving a substantial paycheck is to simply take the qualifying offer.

For Kendrys Morales, taking the qualifying offer would likely be much less of a thing to celebrate. Jon Heyman has previously reported that Scott Boras will reject the offer on Morales’ behalf, believing that he’s in line for a significant paycheck in a winter where good hitters are in short supply. I may be naive and underestimating the power of Scott Boras, but I still fail to see exactly where this magical big contract is going to come from.

For health reasons, Morales has to be viewed a DH — he can play the field irregularly, but not too many days in a row, due to his prior ankle injury — and as such, his market is limited to American League teams. And even at that, you can start crossing a bunch of AL teams off the list pretty quickly. The Astros aren’t giving up a valuable draft pick for an aging DH. The Rays, A’s, Indians, and Twins couldn’t afford Morales even if they wanted him. The Red Sox, Tigers, Blue Jays, White Sox, Royals, and Angels already have their DHs under contract for next year. That’s 11 of the 15 AL teams out of the mix.

That leaves the Yankees, Rangers, Orioles, and the Mariners as potentially interested teams, at least on paper. The Yankees are trying to get under the luxury tax, and if they’re not sure if they want to give Granderson a QO, they seem unlikely to want to give Morales — an inferior player with no defensive value — an even better offer. The Rangers could be interested depending on what happens with Nelson Cruz, but they’ve likely got bigger targets — Brian McCann is widely expected to go to Texas this winter — to pursue, and might prefer to solve their 1B/DH problem through trade or position change than through free agency.

If the Rangers are set on McCann and the Yankees keep Granderson, Boras may very well be left trying to generate a big contract out of a bidding war between the Orioles and Mariners. And it’s not even clear that the Orioles will actually be interested. They’ve repeatedly avoided making large financial commitments, and giving up a pick to sign a player like Morales would be out of character for the organization.

Boras is the king of grandiose statements, but it just isn’t obvious that there’s actually going to be a significant market for Kendrys Morales this winter. The Mariners obviously want him back, given that they’re making the qualifying offer, but it isn’t clear that they’re going to have serious competition for his services. If they can avoid bidding against themselves, they might end up in a situation where they are the only team with heavy interest in Morales, and if Boras sees the writing on the wall, he might decide that $14 million is the best he’s going to do for a mediocre DH.